Good Reading -- March 2022
A selection of great books, articles, and essays
“So intrinsic value is not a technical term in corporate finance circles…?”
“I don’t commonly use the word ‘intrinsic value’ when I’m…talking about [valuing] shares or anything like that.”
“So let me ask you the question, though I know you don’t use the term ‘intrinsic value.’ Is that a common and accepted generally used corporate finance term?”
“I don’t believe it is, no.”
“Okay... Now, are there treatises that are written about corporate finance and corporate valuations, sir? Authoritative treatises that you would recognize as authoritative?”
“Yes, there are.”
“Have you heard of Graham and Dodd…their treatise or a book on securities analysis?”
“I actually have not.”
— A mind-blowing passage between a bankruptcy attorney, the head of restructuring at a major advisory firm, and the bankruptcy judge overseeing the case, in Frumes and Indap’s excellent book, The Caesar’s Palace Coup
Facts & Figures
The London Metal Exchange suspended trading in nickel on March 8th, the first time it had suspended a market since 1985. The exchange also canceled trades executed before the suspension. (Huge loss-making trades originating in China and due in part to the sanctions levied on Russia lead to “an environment where there were literally no offers in the market. Forced buyers, no sellers: Prices can go anywhere.”)
Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War — This is a fascinating piece of historical analysis by all-world writer Roger Lowenstein. Whether you’re looking for a unique take on the Civil War, the development of American government and monetary policy, or just some exceptional writing, this book hits the mark. Highly recommended.
My interview with the author: This Week in Intelligent Investing
There are plenty of reviews and other interviews out there, but this one was especially good: How economic strategies helped to determine the victor in America's Civil War
Caesar’s Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street — I recommend this book for both investing/distressed nerds and tourists alike. The laughs and cringes come early and often, and the enjoyment factors is somewhat perverse, but for jaw-dropping financial entertainment, this is on Mount Rushmore. I’d put this up there with Liar’s Poker and Monkey Business as a generational portrait of Wall Street. But don’t take it from me: no less an authority than Matt Levine calls the book “ a superb inside account of what modern high finance is actually like — the strategies, the personalities, the relationships, the stress, and the shouting. Fascinating, suspenseful, and comprehensive, it is the Barbarians at the Gate of distressed debt.”
My interview with co-author Max Frumes: This Week in Intelligent Investing
Those Guys Have All the Fun: Inside the World of ESPN — This is a looooong oral history of ESPN, but it’s surprisingly good. I skimmed a few parts, but the anecdotes and business angles are really interesting and worth some time.
Corporate Excess: How GE Violated Its Own Compensation Principles — and How Flawed Policies Led to a Fabled Company’s Long Decline — From Roger Lowenstein’s excellent Substack.
The Forgotten History of How 1960s Conglomerates Derailed the American Dream — This is a timely bit of history.
How to Understand the Crisis in Ukraine — This collection of articles from Foreign Affairs has a lot of good material.
CEOs are slammed for BS’ing — but it might actually be a brilliant strategy — Yeah, this doesn’t make much sense to me. This discussion of “How much lying is acceptable?” and essay cover some of the same ground. And Lucy Calloway probably said it best in her screed against corporate claptrap.
Ezra Klein interviews Daniel Yergin — I’m a tourist when it comes to energy, but I’ll read or listen to anything Yergin has to say on the subject.